In this Thursday, Dec. 13, 2012 photo, Israeli Foreign Minister Avigdor Lieberman speaks to the media during an event of his political party in Tel Aviv, Israel, on Friday, Dec. 14, 2012 Lieberman has announced he is resigning a day after an indictment for breach of trust was filed against him by the country's attorney general. (AP Photo/Dan Balilty, File)

In this Thursday, Dec. 13, 2012 photo, Israeli Foreign Minister Avigdor Lieberman speaks to the media during an event of his political party in Tel Aviv, Israel, on Friday, Dec. 14, 2012 Lieberman has announced he is resigning a day after an indictment for breach of trust was filed against him by the country's attorney general. (AP Photo/Dan Balilty, File)
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Dan Balilty
)

JERUSALEM -- The resignation of powerful Foreign Minister Avigdor Lieberman, Benjamin Netanyahu's top Cabinet partner, has shaken up Israeli politics a month before elections. Analysts say Netanyahu is likely to survive, but is losing a valued ally.

Lieberman announced his resignation Friday, a day after the attorney general filed an indictment for breach of trust in a fraud and money-laundering case.

He insisted "I did not break any law" and voiced confidence he would be cleared before the Jan. 22 election.

Lieberman's Yisrael Beitenu and Netanyahu's Likud Party recently joined forces in the parliamentary election, enabling the charismatic ultranationalist to position himself as Netanyahu's heir.

Opinion polls have predicted the list would be by far the largest bloc in Israel's parliament, the Knesset, and would lead a new coalition government. But without Lieberman's sway, negotiations for such a coalition among an array of fractious parties will be more complicated.

Also, analysts doubted Lieberman could make the case go away before the election as Lieberman was hoping.

The blunt-talking politician, a native of Moldova, has amassed power with support from immigrants from the Soviet Union and from others drawn to his broadsides against Israeli Arabs, dovish groups, the Palestinians and Western Europe.

His resignation could mean that Netanyahu would be stuck with a list of leftovers offering little appeal to voters.

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Lieberman spokesman Tzachi Moshe said the minister is not resigning from the party list, meaning he is still running for parliament.

Avraham Diskin, a political scientist at Hebrew University, said that Netanyahu would still probably be re-elected and might make himself foreign minister too. But he said Lieberman's absence might push voters to parties even farther on the right.

Israelis welcomed his decision, saying that it reaffirms the high standards of behavior to which the country has traditionally held politicians.

"Lieberman's resignation was very important because it strengthens the norms of our court system where if an official is suspected of corruption they step down even though legally they don't have to, in order to preserve the public's faith in the government," said Moshe Negbi, Israel Radio's legal affairs commentator.

Shelly Yachimovich, leader of the opposition Labor Party, also rejoiced. "This is a corrupt man who harmed the public's trust in the rule of law and democracy, it's good that he decided to resign," she said on Israel's Channel 2 TV.

Lieberman has endured 16 years of investigations into suspicions that he illicitly received millions of dollars from businessmen and laundered the cash through straw companies in eastern Europe while he was a lawmaker and Cabinet minister.

But in the end, there wasn't enough for a prosecution, Attorney General Yehuda Weinstein said Thursday.

"There is no reasonable chance of a conviction ... and that case should be closed," Weinstein said.

Instead, Lieberman was charged with the lesser offense of breach of trust, for allegedly receiving official material about the investigation against him from the former Israeli ambassador to Belarus.

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